Japan's Year Of The Bull Will Be A Bear: Sales Under 5m
The glorious times when Japan could pride itself as the world’s second largest auto market are definitely over. Never mind that next year will be the year of the bull according to the Chinese/Japanese Zodiac. As cars go, 2009 will be a grizzly bear, the Nikkei (sub) reports. The Japan Automobile Manufacturers Association projects domestic new car sales for 2009 to come in at a paltry 4.86m 4.9 percent below 2008. For the first time in 31 years, Japanese new car sales will be below 5m. If the JAMA projection is correct (and it could be worse,) new car sales in Japan will have declined for five straight years, with the market shrinking by 40 percent from its peak of about 7.78 million units in 1990 to a not seen since the late 1970s. Even the burst of the Japanese bubble in 1990 didn’t have the implosive energy of what’s happening now: Sales dropped into the mid 6m, and recovered in 96. Since 97, sales remained in the high 5m, and started deteriorating in 2006.
JAMA sees large vehicles and luxury models as particularly endangered. The impact on mini vehicles will be less severe, with sales expected to total about 1.85m units in 2009, down only 1.6 percent from the figure forecast for 2008. The trade group sees this trend to continue. Overall domestic sales in Japan for 2008 are projected to reach 5.1m vehicles, down 4 percent from 2007. With an aging population and a protracted recession ahead, this will be the last 5m for quite a while.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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The sword cuts both ways. We saw Japan's automakers grab a huge chunk of the marketshare in the U.S. It was the Asians who grabbed marketshare from the Establishment. Now the tables are turned. Think of all the markets elsewhere in the world where the Japanese were exporting their autos and scooters and motorcycles, and they are now the Establishment. Let's see how or if they learn from the Big 3's mistakes.
The more I see, the more it looks like the US market will be lucky to do 8MM in 2009. Rod, they've pulled back the luxuries, bonuses, and non-core product like mad. Focus is on product and dealer support. Had DET done that 3 or 4 years ago, things might have been different.